Some govs say Medicaid growth could hammer budgets

Any public policy discussions about Medicaid financing has real-world implications for some of the customers of Waymon Tigrett's family's store, Brandon Discount Drugs, in Brandon, Miss. photographed on Tuesday, Sept. 8, 2009. Tigrett, a pharmacist for over 40 years, said as Mississippi lawmakers have finished the state budget the past several years, unfounded rumors have spread that hospitals were turning away Medicaid patients, or that pharmacies were reducing the number of prescriptions they'd fill for people on the program. Rumors that cause much stress among the elderly and poor, he says. (AP Photo/Rogelio V. Solis)
— AP

Any public policy discussions about Medicaid financing has real-world implications for some of the customers of Waymon Tigrett's family's store, Brandon Discount Drugs, in Brandon, Miss. photographed on Tuesday, Sept. 8, 2009. Tigrett, a pharmacist for over 40 years, said as Mississippi lawmakers have finished the state budget the past several years, unfounded rumors have spread that hospitals were turning away Medicaid patients, or that pharmacies were reducing the number of prescriptions they'd fill for people on the program. Rumors that cause much stress among the elderly and poor, he says. (AP Photo/Rogelio V. Solis)
/ AP

JACKSON, Miss. 
States with high levels of poverty and unemployment have been struggling with growing Medicaid budgets during the recession, and some governors worry their financial burdens could get worse as Congress works on a comprehensive health care bill.

They're especially worried about possible expansion of Medicaid, the federal-state health insurance program for the needy and disabled.

"If the federal government wants to expand health care to everybody in the country, they should not force the states to pay part of the bill. If they want to do that, the federal government should pay for it," said Mississippi Gov. Haley Barbour, who is chairman of the Republican Governors Association.

Democratic U.S. Sen. Max Baucus of Montana is part of a bipartisan group of Finance Committee members – the so-called Gang of Six – grappling with health care legislation. Part of Baucus' proposal would expand Medicaid to cover more low-income people. For example, childless adults making up to 133 percent of the federal poverty level would be eligible for the first time, starting in 2014. Under current standards, the federal poverty level is $10,830 for an individual.

A House bill has a similar provision to expand coverage. Under current rules, adults who are not disabled and do not have children cannot be covered by Medicaid, regardless of how poor they are.

Baucus said his staff is trying to schedule a conference call with governors for Tuesday.

Montana Gov. Brian Schweitzer, chairman of the Democratic Governors Association, said in July that he worried the federal government's push to expand Medicaid might force states to borrow money to pay for new health expenses.

Since then, Schweitzer said he has spoken to President Barack Obama and Democratic congressional leaders and has been assured that the final version of health care legislation won't include unfunded mandates for the states.

"I think everybody has looked at each other and said, 'That dog don't hunt,'" Schweitzer said in late August.

Across the country, Medicaid budgets are already strained, especially in states with higher than average poverty and unemployment rates:

– In New Mexico, 18.4 percent live below the poverty level, well above the national average of 13.3 percent. Medicaid enrollment there has increased nearly 10 percent since mid-2008, and Human Services Secretary Pam Hyde said the program could overspend its budget by $35 million to $40 million this fiscal year.

– In Michigan, where unemployment hit 15 percent in July, Republicans who control the state Senate propose saving money by trimming 8 percent from the Medicaid reimbursement rates for physicians, hospitals and other health care providers in the state fiscal year that begins Oct. 1.

– In Georgia, Republican Gov. Sonny Perdue ordered 3 percent funding cuts for Medicaid and public schools and 5 percent cuts for most other state programs because of weak state tax collections in late July, just three weeks into the new fiscal year.

"If we're asked to pick up on state increased costs in health care, it's going to take away from infrastructure, it's going take away from environment, transportation, education, public safety – all the other things that we as states do," said Perdue, who leads a state where 14.5 percent of residents live below the poverty level, according to the U.S. Census.

In Mississippi, where 21.1 percent of residents live in poverty and 20 percent are enrolled in Medicaid, paying for health care has long been a struggle. Barbour said a mandate to cover more people could lead to tax increases.

Barbour won the Mississippi governorship in 2003 after criticizing a 33 percent growth in Medicaid enrollment in four years under his Democratic predecessor. Enrollment has grown 5 percent since Barbour took office in January 2004. Mississippi saw an unexpected hiccup in Medicaid numbers in March, when enrollment jumped by 21,620. It was the largest single-month increase the program had seen since April 2001.

Barbour cut 2.9 percent from the $6 billion state budget this month because of lagging income and sales tax collections, but didn't cut Medicaid because he expects more people to enroll as unemployment climbs. The state's seasonally adjusted unemployment rate jumped from 7.3 percent in July 2008 to 9.7 percent in July 2009.

Some Mississippi officials say a Medicaid expansion would be an efficient way to cover the uninsured. The Henry J. Kaiser Family Foundation says 55.5 percent of Mississippi's poor and low-income residents lack health insurance. The national figure is 36.5 percent.

Because of Mississippi's poverty, the federal government pays a generous share of Medicaid expenses, referred to as matching funds. Until December 2010, when federal stimulus money is scheduled to disappear, the federal government is paying for 84 percent of Medicaid costs in Mississippi. That's up from the usual 76 percent.

"One of the most frustrating things about dealing with Medicaid over the years has been the obsession in the Legislature with reducing Medicaid spending at a time when we have the most favorable Medicaid (federal) match in the nation," said Democrat Hob Bryan, chairman of the state Senate Public Health Committee and supporter of an expanded role for Medicaid. "Mississippi is a winner because of our incredible match."

Medicaid financing is a public policy discussion with real-world implications for some of Waymon Tigrett's customers at his family's store, Brandon Discount Drugs.

Tigrett, a pharmacist, said as Mississippi lawmakers have finished the state budget the past several years, unfounded rumors have spread that hospitals were turning away Medicaid patients, or that pharmacies were reducing the number of prescriptions they'd fill for people on the program. Tigrett said he has told Medicaid customers not to worry and has continued filling their prescriptions for blood-pressure pills, diabetic supplies and other essentials.

"It's a panic thing," Tigrett said from his store in a Jackson suburb. "It worries mostly the elderly people. It causes them undue anxiety, stress."